Answers to the Most Frequently Asked Questions About Title Insurance Fees and Coverage

When it comes to title insurance fees, coverage, and other important policy facts, many homeowners just don’t know the details. In some cases, the act of buying can seem so daunting that they may skip the important step of insuring their investment. In reality, this simple step can end up saving some homeowners many thousands of dollars, making it a worthy part of the process that should not be missed. If you’re thinking of purchasing a house, read through these answers to the most frequently asked questions so you’ll be able to protect what may be your most valuable asset.

What is title insurance and why do I need it?
In some cases, property owners are shocked to discover that someone else has a lien or claim of some type on the home they’ve just purchased. By insuring your property purchases, you’ll be protected from claims that others make on the home and, if necessary, will be reimbursed for any financial loss.

How is it possible that these types of outstanding liens or claims be linked to a property after it has been sold?
Property transfers have been going on for over 200 years in the United States. In those years, transfers have been recorded and re-recorded in books, paper files, and, now, on computers. Sometimes mistakes are made as the records are consulted, copied, and transferred. In many cases, these types of mistakes can be chalked up to human error. Other circumstances arise from fraudulent activity, such as someone acting as the owner of a property when they are not the rightful owner. Other frequent issues include unpaid real estate taxes, a forged signature, or incorrect property descriptions.

How long does a title last?
It remains in effect and protects your investment in your home as long as you own the property, whether that be as little as a few years or as long as many decades.

How much are the title insurance fees and who pays for them?
Title insurance fees vary from sale to sale, based on the value of the home. In some cases, the seller and buyer split the costs of the policy, though most frequently it is considered to be the buyer’s sole responsibility. It is most commonly rolled into the closing costs so the buyer doesn’t need to worry about an additional out-of-pocket expense.

How often does a homeowner pay the fee?
These are paid just once, when the policy is chosen. Many people consider this to be the single most important investment a homeowner can make when buying a new property.